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City Press writes that Finance Minister Tito Mboweni seems headed for another major clash with trade unions if he stands firm on plans to cut the public sector wage bill when he tables his emergency budget in parliament on Wednesday.
The budget has been necessitated by the havoc wreaked on SA’s finances by the coronavirus pandemic. Mboweni has already warned that the country will have to work with a zero-based budget, which means it will have to be drawn up from scratch and expenditure items will have to be justified in terms of absolute necessity. On Friday, Mboweni presented a National Treasury consultative document to Nedlac and all indications from the engagement point to government “yet again biting the bullet on the public wage bill and announcing major cuts to salaries and benefits in the next three years”. But, Mboweni risks infuriating trade unions, which last month called on him to reverse his decision not to honour the 2018 multi-year agreement whereby public servants were due to receive wage increases of between 4.4% and 5.4% from 1 April. In his February budget, Mboweni said there was not enough money in the fiscus to honour this year’s round of increases. Labour federation Cosatu and its affiliate Nehawu have called on Mboweni to use this “second chance” to make amends and fix his fractured relationship with workers. But, the economic and fiscal environment is vastly different now compared to February. At the time, global economic growth was expected to strengthen to 3.3%, with a growth of 3.5% for sub-Saharan Africa. The current reality is that the global economy is set to decline to -5.2%, while the sub-Saharan African economy is set to shrink to -2.8%
- Read the full original of the informative report in the above regard by Juniour Khumalo at City Press
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